Insurance Glossary

Salvage:
The recovery made by an insurance company by the sale of
property which has been taken over from the insured as a part of
loss settlement.

Schedule:
A list of individual items covered by an insurance policy with
their descriptions and values.

Self-Administration:
A procedure where an employer maintains all records regarding
the employees covered under a group insurance plan.

Self-Insurance:
A form of risk financing through which a firm assumes all or a
part of its own losses.

Settlement:
A policy benefit of claim payment.

Settlement Options:
The several ways, other than immediate payment in cash, which
a policyholder or beneficiary may choose to have policy benefits
paid out.

Short-Term Disability Income Insurance:
A group or individual policy usually written to cover a short term
disability (13-26 weeks).

Sickness Insurance:
A form of health insurance providing benefits for loss resulting
from illness or disease.

Special Damages:
Compensation awarded for actual economic losses, such as
medical expenses and lost wages. (See general damages)

Special Risk Insurance:
Coverage for risks or hazards of a special or unusual nature.

Split Funding:
The use of two or more funding agencies for the same pension
plan. An arrangement whereby a portion of the contributions to
the pension plan are paid to a life insurance company and the
remainder of the contributions are invested through a corporate
trustee, primarily in equities.

Standard Insurance:
Insurance written on the basis of regular morbidity underwriting
assumption used by an insurance company and issued at normal
rates.
Standard Markets: Insurance companies for which the vast
majority of people qualify for insurance.

Standard Provision:
The contract provisions required by state statutes until
superseded by the uniform policy provision.

Standard Risk:
An individual who, according to a company's underwriting
standards, is entitled to purchase insurance protection without
extra rating or special restrictions.

State Fund:
A fund set up by a state government to provide a specific line or
lines of insurance, such as Workers Compensation.

State Insurance Department:
A department of a state government whose duty is to regulate
the business of insurance and give the public information on
insurance.

Step-Rate Premium:
A rating structure in which the premiums increase periodically at
pre-determined times.

Stockholder:
A person who owns shares of stock in a corporation.

Stock Insurance Company:
A company in which the legal ownership and control is vested in
the stockholders.

Stock Life Insurance Company:
A life insurance company owned by stockholders who elect a
board to direct the company's management.

Stock Redemption Agreement:
A buy-sell agreement within a corporation that involves the
corporation buying back shares from a deceased stockholder.

Strict Liability:
Usually dealing with property insurance, the liability that
manufacturers and merchandisers may be subject to for
defective products sold by them for damages, regardless of fault
or negligence.

Subrogation:
The process by which an insurance company seeks
reimbursement from another company or person for a claim it
has already paid.

Substandard Insurance:
Insurance issued with an extra premium or special restriction to
those persons who do not qualify for insurance at standard rates.

Substandard Risk:
An individual, who, because of poor health history or physical
limitations, does not measure up to the qualification of a standard
risk.

Supplementary Contract:
An agreement between a life insurance company and a
policyholder or beneficiary by which the company retains the
cash sum payable under an insurance policy and makes
payments in accordance with the settlement option chosen.

Surety Bond:
A bond guaranteeing that a principal will carry out the obligation
for which they are bonded. Most often this is issued to a
contractor.

Important Note: This website provides only a simplified description of coverages and is not a statement of contract. Coverage may not apply in all states. For complete details of coverages, conditions, limits and losses not covered, be sure to read the policy, including all endorsements.